1. Field of the Invention
The present invention is related generally to a data processing system and in particular to a method and apparatus for a supply chain. More particularly, the present invention is directed to a computer implemented method, apparatus, and computer usable program code for enabling variable regulatory or conditional part usage compliance maximizing use of available inventory.
2. Description of the Related Art
Government product and import/export regulations governing the manufacture of various products are becoming increasingly complex every year. In addition, the regulations imposed upon product manufacture can vary depending on the nation, state, and/or region where a particular product will be manufactured, sold, delivered, or utilized. For example, the Restriction of Hazardous Substances Directive (RoHS), adopted in 2003 by the European Union (EU), restricts the use of certain hazardous materials, such as lead and mercury, in the manufacture of electronic and electrical equipment. Each EU member state can adopt its own unique policies and regulations using the RoHS directive as a guide. Thus, there could be as many different versions of RoHS as there are states in the EU.
The requirements for an entity to be in compliance with regulations can vary by ship-to country (product destination), plant of manufacture, machine type, variable compliance rules, or any other factors. A supply chain could also establish its own conditional usage rules, which for the purpose of this discussion look very much like the aforementioned compliance rules and need to be controlled in the same fashion. Under these conditions, managing production of ordered product having unique structure on a country by country and product by product basis to ensure compliance with each country's unique regulations and each unique conditional usage statement is extremely expensive.
Variable compliance regulates the manufacture of a product on percentage basis or percentage compliance for a given product. In other words, if a country regulates the use of lead, the regulations may only require a percentage of the final product be in compliance rather than requiring every part in the product be in complete compliance. Relative compliance can be applied to the part number (PN) count, part number value, product weight, product cost, or any other product feature or variable.
For example, if variable compliance is fifty percent (50%) of part number count then half of the parts in the final product must be in compliance with relevant regulations. If percentage compliance is seventy-five percent (75%) by weight, then the parts making up three-fourths (¾) of the weight of the final product must be in compliance. Likewise, if the percentage compliance is twenty-five percent (25%) of the product cost, then parts attributable to one-fourth (¼) of the cost of the product must be in compliance.
Compliant parts can be substituted for non-compliant parts. As used herein, a compliant part is a part that is in compliance with all applicable laws, rules, and/or regulations, or that meets a supply chain's own conditional usage rules, when applied to a certain product in a defined context. A non-compliant part is a part that is not in compliance with the applicable laws, rules, and/or regulations, or that does not meet a supply chain's own conditional usage rules, when applied to a certain product in a defined context. However, a non-compliant part cannot be substituted for a compliant part. If a non-compliant part is unavailable, a compliant part can be used in its place. However, if a compliant part is unavailable, a non-compliant part cannot be used. In other words, the substitution is one-way. Thus, compliant parts can become a bottle-neck hindering completion of a product if a required compliant part is unavailable. The fact that the compliant parts can be used in situations where compliance is not required increases flexibility, and is necessary in a transition from non-compliant to compliant parts; unfortunately this greatly increases the chance that compliant parts will be used to fulfill demand for which they are not needed, and thus be unavailable for demand for which they are indeed required.
Current manufacturing processes do not support percentage compliance. Compliance is controlled on an all-or-nothing basis. In other words, a product is manufactured using all compliant parts or all non-compliant parts. In particular, current regulatory compliance and usage of inventory is controlled by the release of specific new compliant part numbers and new Bills of Material to cover each variation and control compliance. A Bill of Material is a document describing materials, components, and subassemblies required to produce a given product.
Current methods also apply manual work direction on the shop floor to control compliance, with the use of part substitution tables and ad-hoc manual controls for inventory. In other words, a user manually checks part numbers for substitution parts in compliance with applicable regulations or conditional usage rules. These methods result in excessive complexity in the entire supply chain or uncontrollable, non-repeatable manual processes. Moreover, current methods do not permit the best use of available inventory to take advantage of percentage compliance and other conditional use situations.